Co-Creation in Social Ventures in China: A Missing Link in the Effectual Logic–Performance Relation

Abstract

The mass entrepreneurship policy has introduced a new era of sustainable development in China. Yet, the policy alone does not describe how individuals and organizations might pursue this new approach to economic expansion. In this paper, we suggest that under this new policy, co-creation between social ventures and donors, beneficiaries, and government agencies serves as a form of organizing that helps social ventures navigate this new era of entrepreneurship policy. Through the lens of effectuation theory, we hypothesize that social ventures that use more effectual logic are better able to co-create social value with their stakeholders, and in doing so, will have higher performance. To test these hypotheses, we used structural equation modeling of data collected from top executives of 172 social ventures in China. The results largely support the hypotheses and the findings provide important implications for co-creation via social ventures as one vehicle for invigorating mass entrepreneurship in China.